Google Wallet spurs trade-secrets lawsuit from PayPal

PayPal filed a lawsuit against Google on the same day Google announced its new …

PayPal has filed a lawsuit against Google following the announcement of Google's new Wallet and Offers features, claiming that the company stole PayPal's "trade secrets" to create the services. PayPal notes in its complaint that a key PayPal employee moved to Google following failed negotiations for Google to adopt PayPal as its go-to payment platform on Android.

Google Offers is a Groupon-like service that distributes coupons, while Google Wallet can store credit card and rewards information and communicate them with Near Field Communications (NFC) on capable Android phones. Google announced the launch of the two features on Thursday, and PayPal filed the suit the same day in the state of California.

PayPal claims that it had been "developing capabilities to provide large retailers with next generation 'mobile payment' point of sale technology and services." The company further points out that a former employee who had "intimate knowledge" of these secrets, senior executive Osama Bedier, was recruited to Google by a former eBay executive, Stephanie Tilenius, and hired on January 24 of this year.

This may look suspicious, and PayPal goes on to say that at the time he was interviewing for his job at Google, Bedier was leading negotiations for Google to adopt PayPal as a payment option for mobile apps. PayPal says that during negotiations, it "provided Google with an extensive education in mobile payments."

PayPal wasn't caught completely unaware by Bedier's move, however. According to its own filing, Bedier informed the payment giant as early as November 2010 that he was considering a job offer at Google to work on mobile payments. PayPal told Bedier he would "misappropriate PayPal's trade secrets" if he took the job.

Google has commented on the lawsuit via a statement given to several sites. "Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy," a company spokesperson said. "We respect trade secrets, and will defend ourselves against these claims."

Casey Johnston
Casey Johnston is the former Culture Editor at Ars Technica, and now does the occasional freelance story. She graduated from Columbia University with a degree in Applied Physics. Twitter@caseyjohnston